Brazilian Central Bank’s Survey Offers Hint of Falling Interest Rates

    Recent reductions in the annualized benchmark interest rate (Selic) have made Brazilian market analysts more optimistic about the prospects of a steeper decline over the course of the year.

    According to last Friday’s, March 17, Brazil’s Central Bank (BC) survey of private sector economists, the expectation is for the current annualized rate of 16.50% to fall to 14.38% by the end of 2006. In the previous week’s survey, their prediction for the year-end rate was 14.50%.

    According to the Focus Bulletin, released this Monday, March 20, by the BC, this decrease reflects a general view that, at its April meeting, the Monetary Policy Committee (COPOM) will reduce the Selic by another 0.75 percentage points, as it has done at its last two meetings. The analysts also lowered their forecast for the interest rate in 2007 from 13.38% to 13%.

    The BC survey is conducted weekly to assess tendencies in the chief economic indicators. Based on the views of the analysts who were interviewed, the market has not modified its outlook in any significant way since the previous survey, and everything points to a US dollar worth R$ 2.20 at the end of this year, with the possibility of climbing to R$ 2.40 by the end of 2007.

    The projections continue to indicate a US$ 40 billion trade surplus (exports minus imports) this year and a US$ 35.5 billion surplus next year. The current account surplus, which includes all the country’s commercial and financial transactions abroad, is expected to be around US$ 9 billion this year, while the forecast for next year’s surplus rose slightly, from US$ 4.5 billion to US$ 4.56 billion.

    The Focus Bulletin upped its projection of this year’s industrial growth from 4.10%, last week, to 4.11%. Regarding this year’s growth in the Gross Domestic Product (GDP), the total of all wealth produced in the country, the forecast stood unchanged at 3.5%.

    Agência Brasil


    • Show Comments (1)

    • Guest

      A 3.5% increase in GDP? In a virtually “untapped” market such as Brazil and all the supposed potential there is shameful. That’s not a stat for an “emerging” market with unlimited potential that’s on the verge of “playing with the big boys”, that’s one that has already topped out!

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.


    You May Also Like

    Brazilians Vote in Lula But Call His Administration Second Most Corrupt

    Brazilian President Luiz Inácio Lula da Silva administration is the second most corrupt in ...

    Brazil's União sugar

    Brazil’s Giant NovAmí©rica Now Makes Sugar Under Muslim Inspection

    One of the main players in the Brazilian sugar market, NovAmérica, announced that it ...

    Building being constructed in Brazil

    Jobs in Brazil’s Civil Construction Grow 400%

    Civil construction was the sector of the Brazilian economy that recorded the highest increase ...

    Federal Police director Paulo de Tarso Teixeira

    Brazilian Party Accuses Police of Being Too Harsh in Fighting Corruption Case

    Known as Operation Voucher, the August 9 Brazil’s Federal Police dragnet resulted in the ...

    Cattle Disease Causes US$ 230 Million Loss to Brazil This Year

    Brazilian beef exports should end the year with sales totaling US$ 2.770 billion, the ...

    Brazil Invests in Steel Production Getting Ready for Global Boom

    The Brazilian capacity for steel production should reach 50 million tons per year in ...

    Brazil’s Vice-President Accuses Lula of Having Pact with Devil

    Brazilian Vice-President and Defense Minister. José Alencar, accused President Luiz Inácio Lula da Silva ...

    Brazil Wants to Reduce Taxes for Foreigners Buying Stocks

    Brazil’s Ministry of Finance is studying a proposal to grant certain tax exemptions to ...

    Left Loses Ground and Regroups in Brazil and LatAm

    {mosimage}Throughout 2004, Latin America’s principal social movements encountered an ever more complex scenario and ...

    Sugarcane cutters in Brazil

    Brazilian President Wants Europe to Invest in Biofuel in Africa

    The president of Brazil, Luiz Inácio Lula da Silva, defended three-sided cooperation so as ...